Valentine v. Planters' Bank

1 Free. Ch. 727

• Court: Mississippi Chancery Courts
• Decided: July 1, 1844
• Status: Published

Opinion

The Chancellor.

The complainant made his noté for ten thousand dollars, to S. P. Webster, and gave a mortgage on a number of slaves to secure the payment thereof. The note was afterwards transferred to the Planters’ Bank. The bank sued upon the note, and recovered a judgment at law, and sued out an execution of fieri facias, which was levied upon the slaves named in the mortgage made, for the security of the debt. The complainant obtained in vacation an injunction against, the sale, which the defendant now moves to dissolve. The assignment of the note to the Planters’ Bank carried with it the mortgage made to secure its payment, and consequently placed the bank and the complainant in the relation of mortgagor and mortgagee. I have repeatedly decided, that an equity of redemption in personal property is not subject to seizure and sale under an execution at law. The counsel for the defendant admit that this is the rule, but insist that it is not applicable to a case where the mortgage was made to secure the debt upon which the judgment was rendered It seems to me that the reason of the rule is much stronger in such case, than when applied against a third person as a judgment creditor of the mortgagor. There is no description of creditor whose remedy is so broad and comprehensive as that of a mortgagee. He may, according to the practice, proceed at the same time both at law and in equity; or he may sue at law and proceed against the general property of his debtor, and if that fails to satisfy his claim he may then come into this court to foreclose upon the mortgage property for any balance that may be due. I see no reason in favor of enlarging his remedy in the form here proposed, especially as its tendency would be to embarrass and oppress the mortgagor.

In the case of Atkins v. Sawyer, 1 Pick. Reports, 381, this very question underwent investigation. It was there held, that á mortgagee cannot, at law, enforce a sale of the equity of redemption, of the mortgagor, for the purpose of paying the debt secured by the mortgage. The same doctrine was held by the supreme court of Kentucky. Going’s Executors v. Shreve, 7 Dana. Rep. 64. The reason of the rule is, to my mind, clear and convincing. The question is, shall the mortgagee be allowed to proceed at law to a judgment upon his debt, and then sell under that judgment the equity of redemption of his mortgagor 1 The very relation which the parties sustain, and the opposing interests which they respect, ively have in the subject of the mortgage, seem to forbid such a proceeding. To allow it would be to give to the mortgagee an undue control over the interests of the mortgagor. It not only may, but most usually would result in the sacrifice of the equity of redemption of the mortgagor, or at least in forcing him to a round of perplexing litigation, in order to protect his rights. The legal estate is vested in the mortgagee, and is supposed to be worth the debt which the mortgage was made to secure; the equitable estate remains with the mortgagor, and consists in the value of the thing mortgaged over and above the sum for which the mortgage was made. It is quite clear upon principle, that no form of forced sale by which the purchaser may obtain a complete title to the mortgage property, by simply paying for the equitable interest in it, should be tolerated. Suppose the purchaser should bid the exact amount of the mortgage debt, the mortgage-would seem to be thus extinguished, at least in the hands of the mortgagee, and the purchaser would thus obtain a complete title to the property, when he had only bought and;paid for the equity of redemption. And this, too, although the value of the property might greatly exceed the mortgage debt. In this state of things the mortgagor would seem to be without remedy, or at least a very embarrassing and doubtful one. But if the mortgagee should himself become the purchaser, having bid only the amount of his debt, the rights of the mortgagor would then encounter increased difficulty and embarrassment. In such case, the mortgagee would pay nothing for the equity of redemption, but would get the property merely for the amount for which it was mortgaged; and uniting in himself both the legal and equitable title, would place the mortgagor at defiance. In either case, therefore, the equity of redemption, if worth any thing, would be sacrificed. Chancellor Kent, in the case of Tice v. Annin, 2 John. Ch. 126, seems to have fully appreciated these difficulties, and has declared that the true remedy was to prevent such «ales, by prohibiting the mortgagee from proceeding at law to sell the equity of redemption; and in that opinion I fully concur. The motion to dissolve the injunction must be overruled.